The news, also reported by The Wall Street Journal, which quoted "people familiar with the situation," comes as hard-charging rivals like Samsung Electronics, which makes phones based on Google's (GOOG) popular Android software, continue to expand market share globally.

"Apple has had a phenomenal run, but this news is not a surprise at all," said analyst Joel Achramowicz with Merriman Capital. "I wouldn't expect Apple to indefinitely see the same sort of revenue growth it once enjoyed. Apple once had extraordinary power over the supply chain, but we're now seeing more equilibrium, which is a good thing for the economy and for consumers."

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Other analysts, though, were skeptical of the press reports, particularly The Wall Street Journal's claim that the pullback in orders was "due to weak demand." According to the Japanese report, Apple has asked three of its suppliers in Japan and South Korea to cut almost in half its supplies of LCD panels from an initial plan for about 65 million screens in January-March.

Charles Wolf, an analyst with Needham & Co., said that while he doesn't know the precise reason for Apple's decision, he thinks the dramatic shift could instead be the result of a better-than-expected supply-chain performance by Apple's vendors. Wolf said suppliers initially had problems with the technology used in the new screens for the iPhone 5, but as time passed, they figured things out and were able to produce more of the panels faster. Apple, he said, may simply have over-ordered screens and is now cutting back to adjust.

"There initially was limited availability of the iPhone 5 because of the difficulty vendors were having building those new screens," he said. "They could have been getting, say, only 20 good ones out of 100 attempts. But once yields started to rise, they were maybe getting 80, so maybe Apple had originally ordered a number on the assumption they wouldn't improve the process as much as they did."

Wolf said the supply-demand picture should become a lot more clear next week when Apple announces its first fiscal quarter results. Investors have been jittery in anticipation. Apple set a blistering pace of revenue and earnings growth in recent years, eventually becoming the world's most valuable company in terms of market capitalization. But after peaking last fall, its share price has slumped steadily as growth slowed and its smartphone rivals caught up with and then passed the tech giant in sales.

Samsung, in particular, has given Apple a run for its money. The South Korean electronics maker said Monday that sales of its flagship Galaxy S smartphone had passed 100 million since the first model was launched in May 2010. The Galaxy S3, launched last May, sold more than 40 million in seven months.

Samsung is expected to increase its smartphone sales by more than a third this year, and widen its lead over Apple, according to researcher Strategy Analytics, which has forecast Samsung will sell 290 million smartphones in 2013 versus iPhone sales of 180 million.

After dropping 4 percent shortly after the market opened Monday, briefly falling below $500, Apple shares edged up a bit, ending the day at $501.75, a decline of 3.6 percent for the day.

Contact Patrick May at 408-920-5689; follow him at Twitter.com/patmaymerc.